According to certain industry professionals, the recent regulatory actions taken by the SEC against Coinbase, a U.S.-based company, and Binance, a company based in the Cayman Islands, may ultimately benefit businesses operating in the United States by providing greater regulatory clarity. However, in the immediate to near future, these actions might compel these companies to redirect their efforts to other areas.
Coinbase has recently made an announcement regarding obtaining a license to provide its services in Bermuda. As per reports, the company intends to establish a cryptocurrency trading platform outside of the United States in this location. Additionally, Coinbase is strengthening its operations in Canada, a country that has implemented stricter regulations for cryptocurrency firms. However, Coinbase has managed to secure an enhanced Pre-Registration Undertaking, indicating its willingness to adhere to the forthcoming regulatory framework.
“I anticipate we will witness an increasing number of similar moves,” commented Andrew Lawrence, the co-founder and CEO of Censo Inc., a provider of on-chain custody solutions. “While the United States is currently the largest market, individuals involved in the crypto industry are not building solely based on the current market size, but rather on the future potential. Unfortunately, the future outlook in the United States appears unfavorable.”
Ben Caselin, the Vice President & Chief Strategy Officer at centralized crypto exchange MaskEX, shared a similar sentiment, stating, “Attention is now shifting towards other jurisdictions. This is not the ideal time for crypto startups in the U.S. Established players like Coinbase have the capacity to engage with regulators and find solutions, but entrepreneurs and small businesses in the crypto sector may find more favorable conditions in other locations.”
In response, SEC chief Gary Gensler expressed little concern about the possibility of crypto firms leaving the United States. During an interview with Bloomberg TV, he stated, “We do not require more digital currency… We already have digital currency, and it is called the U.S. dollar.”
Allegrante from Fireblocks acknowledged that while the U.S. market may be highly profitable for certain exchanges, that alone might not be sufficient reason for them to focus all their efforts there. “When a company publicly announces intentions to establish exchange operations outside of the United States, it implies that there are plans in place to gradually shift the balance,” Allegrante stated in reference to Coinbase.
